Twitter reportedly has more than 140 million active users. Facebook users post over 60 million status updates a day. Obviously, social media offers unprecedented opportunities to connect with customers, enhance reputation and build brand. On the flipside, if inadequately managed, social media use can result in reputational damage and substantial financial consequences for your organisation.

The recent Twitter defamation case involving former New Zealand cricketer Chris Cairns is just one example of a legal challenge arising from social media. Although the Cairns v Modi decision is unremarkable from a legal standpoint, it serves as a reminder of why managing risk in the online environment is crucial for individuals and organisations alike.

In this FYI, we:

  • briefly revisit the Cairns v Modi decision;
  • illustrate how social media can damage your reputation; and
  • suggest strategies for managing your online reputation and mitigating the risks of using social media.

The Cairns v Modi decision

Chris Cairns issued defamation proceedings in the London High Court against Indian Premier League founder, Lalit Modi. Modi alleged in a 2010 tweet that Cairns was involved in match-fixing. The Court applied conventional defamation principles to the tweet which had likely been read by only around 65 people. Satisfied there was no evidence as to the truth of the allegation, Justice Bean awarded Cairns £90,000 in damages plus significant court costs. Modi has indicated that he will appeal the decision.

How social media can damage your reputation

The Cairns v Modi decision illustrates that those who publish messages on social media platforms such as Twitter are subject to the same basic defamation rules as traditional communications. And those rules aren't limited to recognised social networking sites like Facebook, LinkedIn and Twitter - social media includes content sharing communities like Reddit, Flickr and YouTube, social bookmarking sites like Pinterest and Digg, and lesser-known services like web feeds and content aggregators.

True, the existing legal framework is having to adapt to address aspects of digital media[1], but the key message to take from the case - don't be lulled into a false sense of security about the casual or conversational nature of new media. The beguiling ease of publishing material through social media channels brings with it significant risk.  Consider the following scenarios:

  • a damaging post on a lesser known blog site gets picked up by mainstream media. Once damaging material is available online, it becomes difficult to completely remove the material or references to it, leaving your organisation vulnerable to on-going or resurrected attacks years down the track;
  • dissatisfied customers engage in digital picketing to criticise, complain or leave negative reviews about your product;
  • protestors or activists hijack your organisation's social media presence and use it to vent their criticisms;
  • current or former employees make offensive, derogatory or commercially sensitive remarks via your organisation's social media channels;
  • your website inadvertently publishes or republishes defamatory content, potentially exposing your organisation to unwanted publicity or legal liability; or
  • "fans" on your Facebook page post comments about your products, attracting the attention of the Commerce Commission.

Managing your Online Reputation

Manage some of the risk involved in social media by adopting the following strategies.

Implement sensible social media rules

Have a comprehensive written internet and social media policy. This policy should clearly set out expectations about the use of social networking channels.[2] Particular care needs to be taken around confidential or proprietary information to avoid inadvertent disclosure. Social media needs immediacy to be effective but this is no excuse to avoid compliance checking.

Moderate your organisation's social media presence to ensure it is not used improperly. If your website invites user comment or review, consider a disclaimer as part of your terms of use policy. The disclaimer may, for instance, stipulate that your site does not endorse or approve comments made on the public section of your site. Similarly, a stipulated 'take-down' policy is a useful tool for justifying the deletion of consumer-posted content which breaches your terms of use.

Monitor and record online activities

Conduct regular online audits for information about you or your company and consider using automatic online monitoring services which provide on-going updates.

Ensure that you closely follow and record your organisation's online activities, especially in times of heightened public scrutiny or crisis. Knowing and understanding what others are saying about you and your organisation will enable you to respond quickly and may assist in diffusing potential disputes before they escalate into disruptive and costly litigation. Be vigilant in protecting your organisation's intellectual property.

Build a positive online presence

Engage positively with the online community and generate social media friendly material to build loyalty in your brand. Positive messaging may help to offset the occasional social media slip-up and offer a credible voice in a crisis.

Avoid re-tweeting or forwarding content without carefully reading it; be cautious about linking to other sites.

Use appropriate social media tools

Consider carefully which social media tools are appropriate for your organisation and likely to benefit your market. For example, Twitter is ideal for sharing frequently updated content and connecting with customers and key people in your industry. However, the 140-character limit on tweets poses particular risks for defamation because context and balance are more difficult to achieve. A tweet will not necessarily be treated by the Court as an expression of honest opinion, one of the key defences to defamation. That may leave the tweeter having to rely on the defence of truth - a defence with more stringent criteria to satisfy.

Respond quickly and proactively

A poorly thought-out update or tweet can be published globally, then re-tweeted, re-published or linked to many times before remedial action can be taken. To mitigate the risk of this occurring or minimising the damage when it does, act promptly and be proactive.

If confidential or compromising information has been leaked, you may need to seek legal advice urgently and before the confidential information is too widely disseminated.

Where to from here?

Engaging with social media is a practical necessity. Used with appropriate caution, social media is a publicity tool with unprecedented reach and influence. Inadequately managed, social media presents significant reputational risk.

Are you concerned about:

  • the emerging risks of social media;
  • your organisation's online presence;
  • adverse content posted by others; or
  • crisis management?